Safety Investigators Clear Toyota–But Safety’s No Longer the Problem

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There’s no evidence that malfunctions in electronics caused sudden acceleration mishaps in Toyota vehicles.  That was the conclusion of an investigation by the National Highway Traffic Safety Administration, assisted by NASA.  The investigation will spare Toyota from additional lawsuits tied to the recall of vehicles in which mechanical problems— the accelerator pinned by a floor mat— caused a number of accidents. It’s also good news the auto industry, as questions have been raised about glitchy electronics being a safety hazard. But Toyota’s problem today isn’t safety—the company long resolved those issues. The Feds have now confirmed it.  The bigger issue is that Toyota’s cars are boring, and in the aftermath of the recall customers have left the brand. This is a company that has to rebuild its design cred, not to mention its corporate culture.

Toyota pursued world dominance selling value-priced cars through a we-know-better approach. And it worked well, but as Toyota gained share and confidence it stopped listening. Negative feedback was not tolerated. Not from the dealers, not from the manufacturing plants and in some ways not from the customers. The relationship was: We make really good cars. You buy them. See you in a couple of years when you order another. That’s a beautiful thing in business when it works. Your competitor doesn’t even get a sniff.

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The accelerator recall disrupted that no-questions-asked relationship. First, the company mishandled it. Toyota’s slow response—doubt, grudging acceptance, and then surrender—prompted Toyota owners to pick their heads up. And when they did, they discovered that the auto industry had changed. The Big Three was no more, but the cars Detroit now makes are vastly improved in quality. And as for style, please. Is there anything more boring than an Avalon?  No wonder Ford is absolutely hammering Toyota in its commercials. Toyota’s pursuers in South Korea were also making headway, using everything Toyota taught them about manufacturing, but being much more consumer focused.

The result is that a fair number of Toyota customers are up for grabs. They are open to buying brands they would not have even considered before. That’s the big loss here. And here’s the worst part: because people typically buy a car about every six years or so, Toyota faces the same issue down the road. In the car business, you don’t lose customers once, you can lose them for a long, long time.

(See photos of the 2011 North American International Auto Show)